Alan Whitehead MP

Member of Parliament for Southampton Test

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My Second Home Allowance

The Independent Parliamentary  Standards (IPSA) committee has recently published the outcome of the arrangements it had implemented whereby  MP’s who had previously  held mortgages for second homes (mostly in London) were provided with a period of two years in which to sell their properties and make alternative arrangements for staying in London during the week when Parliament is sitting. All MPs now either rent or stay in hotels during the week, and claim for the cost of doing so, as I now do.

The Independent Parliamentary  Standards (IPSA) committee has recently published the outcome of the arrangements it had implemented whereby  MP’s who had previously  held mortgages for second homes (mostly in London) were provided with a period of two years in which to sell their properties and make alternative arrangements for staying in London during the week when Parliament is sitting. All MPs now either rent or stay in hotels during the week, and claim for the cost of doing so, as I now do.

The previous rules provided for MPs either to rent or buy, and in the latter case to claim the interest only on mortgages that they had taken out on a second home.  Most MPs did this.

My arrangements differed from some in that firstly I took out a relatively small mortgage on the property I lived in in London until the autumn of 2012, coming to about 50% of the purchase price. Secondly, the mortgage was a capital repayment and interest mortgage which meant that I repaid a substantial proportion of the original mortgage by the time it came to be sold. This is why, at the time of the sale, the mortgage represented under 30% of the value of the property. 

The amount I paid to IPSA, representing capital gain on the property during IPSAs time as the regulator, reflected the fact that I had repaid a substantial proportion of the original mortgage, and hence was not reclaimable by IPSA.  The sum asked for, just over £5000 reflected this, and was paid in full by me by the end of the year.  IPSA did discount an element of this payment to account for capital gains tax, which I will of course be paying on the overall ‘profit’ between purchase and sale price.  The rest of the capital gain tax is quite rightly payable by me on the gain accrued in the main by my investment in the property and the added sums accrued to that investment by payment of the capital element of the mortgage.

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